CAN YOU MANAGE THE PROJECT?
This a perfectly good question that every client asks. So the industry-standard method is the use of supporting documentation in the form of schedules. These schedules are then split into price-related schedules and non-priced schedules. The non-priced and priced schedules in most cases are submitted with the tender submission however some times the client may choose to review the building in a closed tender by selecting a number of builders through a “pre-qualifying” process. Once you have been selected as a preferred builder, you then move onto the pricing round. Even so, the pre-qualified builder would still submit some of the standard Non-priced criteria again as a form of marketing.
So let’s just assume that builders have to submit both the non-priced & priced criteria at the same time when submitting their bid.
SUPPORTING DOCUMENTATION
Within the non-priced tender schedules – most medium to complex projects, any project that deals with a live environment in a public area will normally ask for proof that the builder understands the complexity of the project and any staging that may be required. Then you may also need to summarise your construction method or approach. These are all items required within the Non-Priced Schedules.
- Construction Program – Normally a critical path document (in Microsoft Project or equal) that showing key milestone dates such as construction start-finish etc plus all interaction of the trades and services to complete the project. The program illustrates the design time, construction durations and wet weather duration.
- Site-Specific Establishment / Staging Plan – This is a plan where site sheds, perimeter fencing to safely manage the site. The plan may be also used as a staging plan if a project has a number of separate stages. The stage management plan illustrates the number of sheds, temporary fencing, and hoarding, crane location, and scaffolding and other key items to be measured.
- Methodology – This is a written document acknowledging the stakeholders of the project, how the builder is going to manage the project safely and any detailed understanding to convince the client the builder has understood the complexity of the project. The methodology indicates the number of staff to manage the project on and off the site.
- Construction Management Plan – This may be a standard document with site-specific modifications. Generally, this document is a summary of all the builder’s policies, safety, and systems management processes to manage all projects.
The above documents are the key documents that the estimator would refer to be able to draft up preliminary costs.
Again most organizations these documents can be complete by the solo flying estimator or preferably the contracts team.
As a rule, I always find that if you engage the contracts team to complete the above documents. The main reason is simply to engage the contract team (& reduce your workload) into the project and another set of eyes over the documents is always wise. Hopefully, the contract team may come up with some smarts to win the project. They will develop the program, understand the staffing to safely manage the project. The other advantage is both the contract team and the estimating team get an understanding of each others roles and issues each face.
Estimators – embrace this process. It can be painful sometimes however if managed well can be an incredibly beneficial process.
Now, this is very important – To win a tender your preliminaries need to be skinny. A project manager will always be conservative in their trade processes and run the risk of overcooking the duration time and staffing to run a project.
Project managers normally estimate program duration heavy where a hardened estimator will normally estimate the duration skinny.
Estimators need to challenge every program supplied from the contracts teams in a respectful manner. So you need the bid manager or construction manager to make a final decision. But a skinny approach to preliminaries is always best in winning tenders.
Note – Never challenge any cost associated with safety, Never cut any costs from the preliminaries.
At the end of the process, you have an understanding of management required, staffing and duration. (All these items allow the estimator to complete the preliminary costs for the project).
From a resourcing point of view – if there are no resources to help – the solo flying estimator is the catching glove for all of the above.
PRELIMINARY DOCUMENTATION
Preliminaries costs are basically all the indirect costs you need to pay for during construction that you don’t see when the project is completed. The preliminary cost has different levels of complexity in 1st Tier companies however in Tier 2 & 3 building organizations the structure is very similar.
Preliminaries cost are normally are either time related or based on construction costs and due to the safety culture of the industry – an organization preliminary is directly related to their safety culture. To engage a builder to construct a building clients are now understand that there is a level of staff that is required to service there need and also manage a site aiming for a safety culture striving towards zero harm.
On an even playing field, there shouldn’t be much difference between one builder and another. But there are still companies who price a building with suicide costs on preliminaries to win a project. Or they hide their overheads and part of the preliminary costs within the trade schedules at the front end of these schedules.
It is a game that we play. I am happy to say that many businesses now scrutinizes builder to ensure their safety policies and practices are up to speed.
Examples of standard preliminary costs include but not limited to the following:
- Management cost
- Site Staff
- Living away from home allowances (LAFHA)
- Labouring
- Surveying during construction
- Hoardings, fences & barriers
- Site accommodation
- Temporary roads
- Security & communication
- Plant & equipment, cranes, elevated work platform (EWP)
- Scaffolding
- Safety precautions
- Insurance & bank guarantees (GBs) or binds
- Sundry operation cost (Systems management & accreditation)
- Overhead recoverable (business ruining costs)
- Cleaning & rubbish removal.
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Tender Process – Click Here